COVID-19 Update

CARES Act Summary

Good morning Campus Bible Church Family,

As your Board Treasurer and on behalf of the entire Pastoral Staff and Elder Board, we’d like to keep you updated with timely information that may help you and/or your business in the coming weeks. On Friday afternoon, President Trump signed into law a third emergency measure in response to the COVID-19 crisis. The Coronavirus Aid, Relief and Economic Security (CARES) Act builds on the two previous tax relief and cash payments for individuals, as well as more robust support for businesses. This bill also includes aid for hospitals and affected individuals and emergency loans for impacted industries. Below you’ll find a condensed summary of the key provisions from the nearly 900-page bill. We have additional information on the small business interruption loans that are available if you need it. Feel free to share this summary with loved ones, neighbors and friends. God Bless!

Summary of key provisions in the CARES Act

Direct cash payments for consumers
The bill provides “recovery rebates” of up to $1,200 for individuals earning an adjusted gross income (AGI) of less than $75,000, or $2,400 for joint filers earning less than $150,000. The amount increases by $500 for each child. The rebate is phased out above those AGI limits.

Small business interruption loans
Businesses with less than 500 employees can receive fee-free loans of up to $10 million to help cover payroll, employee salaries, paid sick leave, mortgages, rent and other debts. Loans that are used to cover payroll could be forgiven if businesses retain employees and salary levels [].

Expanded unemployment insurance
The bill increases and extends unemployment benefits, including access to health insurance, for four months for Americans who have lost jobs or been furloughed. Self-employed and contract workers, who are typically ineligible, can now qualify.

Relief for retirement plans and IRAs
The legislation permits employers to give retirement plan participants who have been impacted by COVID-19 the ability to withdraw retirement plan funds up to $100,000 and increase access to plan loans. Such COVID-19-related distributions can be taken from IRAs as well. The bill waives the 10% premature withdrawal penalty and provides the option for such distributions to be taxed ratably over three years. These COVID-19-related distributions can be rolled back into a retirement plan or IRA within three years. The bill also temporarily suspends Required Minimum Distributions (RMD) for 401(k)s and IRAs in 2020. This would include an RMD normally due by April 1 for individuals who turned 70½ in 2019, but only if the individual did not take their RMD in 2019.

Suspended remittance of employer Social Security tax
Employers and self-employed individuals are allowed to defer payment of the employer share of Social Security tax for the remainder of 2020. Half of that amount is due on Dec. 31, 2021, and the remainder on Dec. 31, 2022.

Student loan payments suspended
The bill allows individuals to defer payments on federal student loan payments, principal and interest through Sept. 30, 2020. It also allows students whose universities have canceled classes to keep Pell Grants. Employers can also provide a student loan repayment benefit to employees on a tax-free basis.

Expansion of charitable contribution deduction
Certain cash charitable contributions up to $300 can now be treated as above-the-line deductions for non-itemizers and the 60% of AGI limitation for cash contributions is waived for itemizers.

Nick Allen, Board Treasurer